Demand For Physical Bullion Surges – Will It Break Paper Markets?

Last year felt like a pivot point in U.S. history. The pandemic and election left the nation ideologically divided.

There seem to be only three resolutions going forward.

America will face an increasingly authoritarian federal government ruling over a largely apathetic populace, the nation will splinter, or leadership will emerge which is somehow capable of bridging the ideological divide between the American left and the right.

Gold bugs aren’t betting on bridges being built any time soon. Demand for physical metal ratcheted up to a new all-time high in January.

As investors take stock of markets under a Biden presidency, they will find some drivers remain the same.

The Federal Reserve has been inflating financial assets since the central bankers went berserk last March. They pumped trillions into the debt markets via Wall Street banks and cut interest rates back to zero.

The financial markets have been riding high on that massive wave of stimulus since then. However, it is only a matter of time before the stimulus wears off. Central bankers claim they are trying to goose the real economy.

Those claims are ringing hollow. The stimulus has produced no lasting economic strength.

What we have is lots of inflation, concentrated heavily in the financial markets and real estate. The Federal Reserve must continually go ‘bigger” just to keep air in those bubbles.

Joe Biden certainly won’t impose discipline or restraint at the Fed.

Americans can also expect more of the same from Congress. Biden already asked for nearly $2 trillion in stimulus. Whatever he gets will just be a down payment, as Congress works, again and again, to increase spending and grow government.

Warning! Heavy Debt!The Democrats who now control both the House and Senate won’t be impeded by calls for fiscal restraint. The unpayable federal debt could easily exceed $40 trillion before the next presidential election in 2024.

Metals investors should avoid the rigged casino otherwise known as the futures market. They will not get a fair shake. Gold and silver price discovery will continue to be a sham much of the time.

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